DryShips has decided to forfeit $42.8m to get out of a commitment to buy a capesize newbuilding, and said this decision would save it $71.2m in capital expenditure this year.
The cancellation adds to some 17 ship cancellations implemented by the Nasdaq-listed dry bulk operator since the market downturn last autumn, which the company has estimated cut its capital expenditure by $2bn.
DryShips chairman and chief executive George Economou said: “This cancellation reaffirms the company’s strategy to cut down our capex requirements. This cancellation is consistent with our continued position to evaluate all of our funding options which includes potential further capex reductions, fleet additions, equity issuances and debt placements.”
The company has been seeking waivers on some $2.8bn in debt as the market downturn intensified, and has issued almost $1bn in new equity that increased its number of shares outstanding from 43m to 258m.
However, Mr Economou told a conference call earlier this week that almost all the debt waivers needed by DryShips are in place, and that the equity cash is more by way of a war chest with which to pounce on distressed assets at cheap prices.
The cancelled 180,000 dwt capesize, which is scheduled for delivery this month, was originally contracted by South Korea’s Hanjin Shipping at Hyundai Heavy Industries in 2007 for an undisclosed price.
Subsequently, Hanjin entered into a resale contract with DryShips at a price of $114m.
DryShips said the agreed cancellation penalty included the original deposit of 20% it had put down against the order.
Hanjin Shipping told Lloyd’s List that news reports, a five-year charter to North China Shipping was not attached to the vessel.
“We are still negotiating contract terms for this vessel," a source at Hanjin said.
According to the company’s annual report filed with US regulators, this cancellation would leave DryShips with a portfolio of four newbuildings: two 75,000 dwt panamaxes and two 82,000 dwt kamsarmaxes, with deliveries through to next year.
DryShips owns a fleet of 42 bulk carriers in the water. It owns two ultra-deepwater semi-submersible drilling rigs and four ultra deepwater drillship newbuildings.
The cancellation adds to some 17 ship cancellations implemented by the Nasdaq-listed dry bulk operator since the market downturn last autumn, which the company has estimated cut its capital expenditure by $2bn.
DryShips chairman and chief executive George Economou said: “This cancellation reaffirms the company’s strategy to cut down our capex requirements. This cancellation is consistent with our continued position to evaluate all of our funding options which includes potential further capex reductions, fleet additions, equity issuances and debt placements.”
The company has been seeking waivers on some $2.8bn in debt as the market downturn intensified, and has issued almost $1bn in new equity that increased its number of shares outstanding from 43m to 258m.
However, Mr Economou told a conference call earlier this week that almost all the debt waivers needed by DryShips are in place, and that the equity cash is more by way of a war chest with which to pounce on distressed assets at cheap prices.
The cancelled 180,000 dwt capesize, which is scheduled for delivery this month, was originally contracted by South Korea’s Hanjin Shipping at Hyundai Heavy Industries in 2007 for an undisclosed price.
Subsequently, Hanjin entered into a resale contract with DryShips at a price of $114m.
DryShips said the agreed cancellation penalty included the original deposit of 20% it had put down against the order.
Hanjin Shipping told Lloyd’s List that news reports, a five-year charter to North China Shipping was not attached to the vessel.
“We are still negotiating contract terms for this vessel," a source at Hanjin said.
According to the company’s annual report filed with US regulators, this cancellation would leave DryShips with a portfolio of four newbuildings: two 75,000 dwt panamaxes and two 82,000 dwt kamsarmaxes, with deliveries through to next year.
DryShips owns a fleet of 42 bulk carriers in the water. It owns two ultra-deepwater semi-submersible drilling rigs and four ultra deepwater drillship newbuildings.